China to charge more for power to subsidize green energy

China will raise tariffs on power to raise money which will be used to fund subsidies for renewable energy, beginning September 25, 2013, in a bid to have better quality air, the country’s economic planner.
The price increase will exclude residential and agricultural power, the National Development and Reform Commission (NDRC) said.
The additional charge for clean energy will be CNY0.015 (USD0.0024) per kilowatt-hour, an increase from the current CNY0.008 (USD0 .001) per kilowatt-hour.
The cost for renewable energy is relatively high and the international practice is to subsidize the sector at its outset, Li Caihua, deputy head of pricing at the NDRC, said.
China has charged a levy on wholesale power to fund subsidies for renewable energy, an amount which increased from CNY0.001 (USD0 .0002) per kilowatt-hour in 2006 to 0.008 (USD0 .001) this year.
By charging this levy, the NDRC estimates it can collect CNY20 billion (USD3.25 billion) annually, but there has been a shortfall in the subsidy fund in recent years as renewable energy has been growing quickly.
The fund reported a shortfall of CNY10.7 billion (USD 1.74 billion) at the end of 2011 which was forecast to hit CNY33 billion (USD5.73 billion) in 2015, Li said.
The pricing will mainly be made at wholesale levels and retail prices will not be affected because coal prices have been falling, he said.
(August 31, 2013)